featured report

The Digital Consumer of the Future

Projects

Over the last century we have collectively witnessed the value that is unlocked for industries as consumers shift their demand to new products and services.

These demand shifts are often driven by technology in the form of new solutions that displace prior offerings. Classic examples are consumers shifting their demand from horses to automobile; typewriters to email; and portable radios to digital music players. Equally transformational shifts are driven by changes in the culture and economy. The movement from cities to suburbs (…and now back again to cities); formal to casual business attire; and the concept of retirement are examples grounded in a migration to a new way of life with different choices for how we live and work.

We are particularly interested in examining emerging demand shifts that are poised to unlock substantial economic value during the next 5-10 year time horizon. Our primary focus is investigating big global markets with huge economic value at stake, and where the shift is already “in play” and accelerating every year. At the same time, these are markets where there is substantial uncertainty about the shape, trajectory and timing of the demand shift.

Our team is scanning the world for the biggest and most important emerging demand shifts, and will conduct new research in collaboration with a broad cross-section of experts drawn from multiple industries to uncover the biggest opportunities (and challenges) facing business and government leaders as these shifts accelerate in the coming years.

Recent Reports

For companies serving consumers in the modern, connected economy, income-based approaches to growth, such as seeking growth opportunities from the middle class, are insufficient. To address these shortcomings, we have developed a new approach to identify the consumers able and ready to be higher spenders. We call them Connected Spenders, and over the next decade, they will account for 46% of the world’s consumer spending, or $260 trillion. Connected Spenders are the ideal consumer for a variety of goods and services, and consumer-facing businesses should use them as a first lens in making decisions about which markets to invest in and how to communicate with and reach consumers.

Over the past several decades, China has brought hundreds of millions of citizens out of poverty and created a thriving consumer class that has made it the second-largest consumer market in the world in aggregate terms. But, on a per-capita basis, consumption is a fraction of the level in mature economies.
A Wealth of Opportunity: Chinese Consumers and Their Shifting Demand for Financial Services finds vast untapped demand among Chinese consumers for household financial services products such as deposit accounts, credit cards, and debit cards. It identifies two scenarios for how growth in Chinese financial services could accelerate consumption. Under the most likely scenario, expanded access will add $650 billion to Chinese consumption over the next decade, but it could be as much as $950 billion.

China is the world's largest automotive market with more than 21 million sales in 2015. At the same time, many cities are experiencing high levels of pollution, and the central government's most recent 5-year plan emphasizes the importance of green energy, including new energy vehicles. Sales of new energy vehicles are growing quickly but still represent a small portion of the market. In this report, we show there is strong interest in new energy vehicles among Chinese consumers, particularly among the Connected Spenders. These consumers will account for the majority of consumption in China over the next decade, and their unique preferences will drive demand for new energy vehicles as well. We summarize those dynamics and discuss the implications for the auto industry.

Consumer demand for cashless payments is growing, driving a global movement towards financial inclusion. The technology that enables digital storage and exchange of money is transforming with the exploding growth of internet access and penetration of mobile devices. This is not only causing a major disruption in the cashless payment industry but also creating new complexities in the global payment systems. We summarize the drivers of this global shift, the major innovations and players leading the way, and the opportunities for consumer-facing businesses as they navigate the change.

One of the most significant questions for global business leaders over the next decade is how to capture Chinese consumption growth opportunities against a backdrop of deep structural challenges in China’s economy. We provide a new perspective on how Chinese consumer spending will grow. We conclude that, while growth will become more difficult to capture in the increasingly complex environment in which consumer businesses are operating, that significant opportunities exist for them. We recommend strategies to capture these opportunities—a prioritization of the cities in which to invest, and the consumers with which businesses should be engaging.

It is widely considered that a successful transition to a consumption-led economy is essential for continued robust economic growth in China. We assess the likelihood of such a transition based on the historical experience of other economies, and what a successful transition would mean for growth in Chinese consumer spending. Business leaders must play an active role in a successful transition, alongside policy actions. We outline areas where businesses will have the greatest opportunity for contributing to a transition, to their benefit as well as that of the global economy.